Figma (NYSE: FIG) has had one of the wildest post-IPO rides in recent memory. After debuting at $33 in July 2025, the stock soared to nearly $143 before crashing to around $20. That’s an 88% collapse from peak levels, despite the business itself continuing to grow rapidly.
The selloff came after fears that AI tools, especially free offerings from Google, would destroy Figma’s pricing power. Investors suddenly treated Figma like an AI loser instead of an AI winner.
But the latest earnings report may have changed that narrative.
Figma reported Q1 2026 revenue of $333.4 million, up 46% year over year and ahead of expectations. Non-GAAP EPS came in at $0.10 versus forecasts of $0.06. More importantly, growth is accelerating again after rising 40% in Q4 and 38% in Q3.
Customer metrics were equally strong. Net dollar retention climbed to 139%, customers spending over $100,000 annually grew 48%, and Pro team conversions jumped 150%. That suggests adoption is spreading deeper across organizations rather than slowing down.
See how Figma’s financials compare to peers, Adobe, Microsoft, Atlassian, Zoom Communications, and Autodesk.
AI is now becoming part of the bull case instead of the bear case for Figma. CEO Dylan Field argued that as AI makes coding easier, design and product judgment become even more valuable. Early signs support that view. Figma’s AI credit monetization exceeded expectations, while integrations with tools like Claude Code, Cursor, and VS Code are helping position Figma as a core layer in AI-driven software development.
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The company also raised full-year 2026 guidance to roughly $1.425 billion in revenue and boosted operating income guidance. Gross margins dipped slightly to 82% because of higher AI costs, but management expects margins to stay above 80%.
At around 10 times sales, the valuation is where things get interesting. For a software company growing above 40% with gross margins above 80%, that’s not particularly expensive by historical standards. There could be significant upside from current levels, though concerns remain around stock-based compensation, ongoing GAAP losses, and rising competition in AI-powered design tools.
Figma’s story has changed fast. Less than a year ago, it was seen as an IPO darling, then an AI casualty. Now investors are starting to wonder if the company is actually becoming one of the biggest beneficiaries of the AI software boom instead.
While Figma may have upside as its AI narrative takes hold, its stock remains highly volatile, and earnings can swing sharply with changes in supply and pricing. When you want to survive market swings to protect wealth and grow your money in the long run, portfolios are the right choice. Trefis High Quality Portfolio can help you stay invested, capture upside, and mitigate the downside associated with any individual stock.
